Long-term memory is a form of memory where associations are made between different items. Although it is not as easy to access as short term memory, it can store vastly more information and will often persist when the brain is no longer capable of forming new memories.
Long-term memories are thought to be created when items are stored repeatedly in short term memory. As short term memory can only store a small number of items, certain associations "pass out" and if they are strong enough they eventually form new pathways in the brain that can be recalled. It is thought this happens through "rehearsal" (repeating a fact in short-term memory over and over again) or through "strong association" where a memory can be associated with another item that exists in long-term memory.
At present, it is not known if long-term memory fades with time, or merely becomes harder and harder to access if it certain items are not accessed for some period of time.
It is believed that sleep plays an important role in the formation of long-term memory.